2012 (10) TMI 785 - AT - Income Tax

Difference in gross receipts as per TDS certificates and as declared by assessee - CIT(A) deleted the addition - Held that - As per the reconciliations submitted by assessee out of gross receipts as per TDS certificates, a sum of ₹ 1,63,93,102/- was received as advance from U.P. Jal Nigam and ₹ 40,00,000/- was received as advance from C & D S Unit of UP Jal Nigam, Baghpat and the same were duly reflected in the balance sheet under the head secured loan. The assessee has also furnished the confirmations in this regard from the respective departments confirming the advance given to the assessee vide its letter dated 17.3.06 & the assessment was framed after considering the reconciliation statement and confirmations furnished by the assessee. CIT(A) has clearly given a finding that the assessee has submitted its reconciliation of the total turnover and the variation in the receipts as per accounts and that as per the TDS certificates is cogently explained. Based on the reconciliation, the addition in this case is not sustainable - in favour of assessee.

Summary

Issues:
1. Addition of Rs. 1,96,09,782 made by the Assessing Officer on account of difference between gross receipts as per TDS certificates and those declared by the assessee.

Analysis:
The Assessing Officer observed a variance between the gross receipts as per TDS certificates and those reflected in the assessee's P&L account. Consequently, an addition of Rs. 1,96,09,782 was made, alleging understatement by the assessee. The Commissioner of Income Tax (Appeals) noted the assessee's submission that the difference arose due to certain receipts subjected to TDS being offered as income for completed work, while the remaining amounts were shown as advances in the balance sheet. The Commissioner found no suppression of receipts based on this explanation and deleted the addition.

The Revenue challenged this decision, arguing that the addition was justified. However, the Tribunal upheld the Commissioner's order, emphasizing that the assessee had provided a detailed reconciliation of total turnover as per TDS certificates and the books of account. The Tribunal also considered a letter from the Deputy Commissioner of Income Tax confirming the reconciliation provided by the assessee. Ultimately, the Tribunal concluded that the variance in receipts had been adequately explained, rendering the addition unsustainable.

Therefore, the Tribunal dismissed the Revenue's appeal, affirming the Commissioner's decision to delete the addition of Rs. 1,96,09,782.